Nationalization in Britain

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Nationalization in Britain

 Nationalization refers to the permanent take over of ownership and management of a business by the government from the private owners.  It can take place voluntary when the business is offered for sale or it can take place involuntary where the owners are compensated with worthless bonds or no payment at all (Kendall, 1992). In most cases, the arguments for nationalization are meant to ensure that the business meets the needs of the people. Nationalization can also take place when an important business that provides essential services to the people comes under the threat of collapse. In the course of 20th century, British experienced rapid nationalization under the Labour Party. From 1945, the Labour Party nationalized a number of key industries in Britain. However, their experience with nationalization was negative as it led to decline in economic growth and stagnation and the policy was reversed by Thatcher from 1970s leading to economic growth. Therefore, Britain experience with nationalization can be considered a failure.

Britain has a long history of industrialization being the first nation to industrialize in the world. In the 20th century, Britain showed an increased desire to flex her economic muscles in the world and this period coincided with her colonization of African and imperialism in Asia (Cole, 1990).  The first half of twentieth century saw increased private role in the economy and the government was delineating the role of administration from the control of the economy.  Throughout the first and the Second World War, Britain had shown exemplary desire to let the private sector have its own way in the economy (Milward, 1970).  However, the Second World War was a turning point for the country economy.

In course of the war, British economy had lost a huge amount of its wealth. The economy had been driven by the need to cater for the war and it had to take some time if it had to be re-organized to serve the purpose of peaceful production rather than war driven production (Pollard, 1967).  One of the most important outcomes of the war was ongoing negotiation, crafted by United States that sought to liberalize the world economy so that more markets could be open and the establishment of Breton Wood system in 1944 was a major player in crafting this system of trade. However immediately after the war, United States slumped a ban on Lend-Lease which had been a fundamental sustainability of British economy during the years of the war. After the war, Britain was in a fix to revive its economy and it had to go an uphill task with United States offering unfavourable loan terms.  The Labour government took various measures to revive the economy including undervaluing of the currency as last resort but the economy was still in a fix.

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The Labour party outlined its nationalization plan in 1945 when it released its electoral document which was tilted Let Us Face The Future.  In this document the Labour Party stipulated that there were some industries which had to be granted state ownership and management in order to provide direct services to the nation. However, this document also outlined that there were small business which had to be left in the hands of the private sector and allowed to continue with their useful work to the public (Foreman-Peck, 2004).  The Labour Party document also recognized that there were big industries which ...

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